Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>The end of Rakuten free plans is unlikely to have a major industry read across although the end of loyalty point chasing should help save on promotional costs</li>
<li>Mobile erosion has likely peaked but full-year losses for FY22 will be higher than last year. We expect the progression to profitability to be modest</li>
<li>Listing the securities business is a positive as it surfaces fintech value but allocating proceeds from valuable asset sales to funding mobile is not</li>
</ul>


The end of Rakuten free plans is unlikely to have a major industry read across although the end of loyalty point chasing should help save on promotional costs
Mobile erosion has likely peaked but full-year losses for FY22 will be higher than last year. We expect the progression to profitability to be modest
Listing the securities business is a positive as it surfaces fintech value but allocating proceeds from valuable asset sales to funding mobile is not


Rakuten (Neutral) - Follow-Up on Q1 Results and Thoughts on a Securities Listing

<ul>
<li>We have put together the historical financial data for Rakuten Bank going back to FY14 as reported by parent Rakuten Group, which uses IFRS and is on a December year-end</li>
<li>As a separate company, Bank looks more local using J-GAAP accounting and a March year-end. So when the IPO filing comes our data will need to be updated/converted</li>
<li>As we discussed last week, the IPO of Rakuten Bank could help surface the value of fintech assets although heavy losses for the mobile business keep us on the sideline</li>
</ul>


We have put together the historical financial data for Rakuten Bank going back to FY14 as reported by parent Rakuten Group, which uses IFRS and is on a December year-end
As a separate company, Bank looks more local using J-GAAP accounting and a March year-end. So when the IPO filing comes our data will need to be updated/converted
As we discussed last week, the IPO of Rakuten Bank could help surface the value of fintech assets although heavy losses for the mobile business keep us on the sideline


<ul>
<li>The pending IPO of Rakuten Bank could be worth ¥380bn (2x book) and boosts appreciation of a fintech business we think is worth ¥1,400/share</li>
<li>That is well above the current share price reflecting the valuation drag of an expensive mobile segment, which is expected to hit peak losses in Q1 22</li>
<li>We expect mobile break-even will take longer than expected and downside here offsets fintech excitement - we remain at Neutral</li>
</ul>


The pending IPO of Rakuten Bank could be worth ¥380bn (2x book) and boosts appreciation of a fintech business we think is worth ¥1,400/share
That is well above the current share price reflecting the valuation drag of an expensive mobile segment, which is expected to hit peak losses in Q1 22
We expect mobile break-even will take longer than expected and downside here offsets fintech excitement - we remain at Neutral


Rakuten Group (Neutral) - Bank IPO a Step Towards Unlocking Fintech but Mobile Worries Remain

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

SBI Sumishin Net Bank  / Equity Capital Markets

<ul>
<li>SBI Sumishin Net Bank (SSNB) will be looking to raise around US$1.1bn in its upcoming IPO.</li>
<li>SSNB is a Japanese digital bank set up as a 50-50 joint venture between Sumitomo Mitsui Trust Bank, Japan’s largest trust bank, and SBI Group, a financial services firm. </li>
<li>The deal, if successful, would be Japan’s first online-only bank to go public. In this note, we will talk about our earnings forecast and throughts in valuations.</li>
</ul>


SBI Sumishin Net Bank (SSNB) will be looking to raise around US$1.1bn in its upcoming IPO.
SSNB is a Japanese digital bank set up as a 50-50 joint venture between Sumitomo Mitsui Trust Bank, Japan’s largest trust bank, and SBI Group, a financial services firm. 
The deal, if successful, would be Japan’s first online-only bank to go public. In this note, we will talk about our earnings forecast and throughts in valuations.


SBI Sumishin Net Bank Pre-IPO - Earnings Forecast and Thoughts on Valuations

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sbi-sumishin-net-bank" target="_blank" data-smartkarma-citation="entities:34572:1" rel="noopener">SBI Sumishin Net Bank (7163 JP)</a> aims to be the first listed Japanese online bank. It is looking to raise about $1 billion. The listing is set for 24 March. </li>
<li>Founded in 2007, SBI Sumishin Net Bank is owned 50% by <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a> and 50% by <a href="https://www.smartkarma.com/entities/sumitomo-mitsui-trust-holdings-inc" target="_blank" data-smartkarma-citation="entities:19450:1" rel="noopener">Sumitomo Mitsui Trust Holdings (8309 JP)</a>.</li>
<li>On balance, the fundamentals look sound. The IPO is worth a look for investors willing to brave the weak IPO market conditions.       </li>
</ul>



SBI Sumishin Net Bank (7163 JP) aims to be the first listed Japanese online bank. It is looking to raise about $1 billion. The listing is set for 24 March. 
Founded in 2007, SBI Sumishin Net Bank is owned 50% by SBI Holdings (8473 JP) and 50% by Sumitomo Mitsui Trust Holdings (8309 JP).
On balance, the fundamentals look sound. The IPO is worth a look for investors willing to brave the weak IPO market conditions.       


SBI Sumishin Net Bank IPO: Bricks ‘n’ Clicks

Japan

Rakuten Bank, Ltd. operates as an Internet based bank. The Company provides banking services including deposits, loans, exchange transactions, and other services. Rakuten Bank also provides financial services including investment trusts, securities, credit and cash cards, lottery tickets, and others.

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Rakuten Bank (5838 JP)

Rakuten (Neutral) - Follow-Up on Q1 Results and Thoughts on a Securities Listing

Rakuten is trading at near-term lows as the path to mobile profitability and cash burn may be longer than expected. A second fintech IPO is...

Kirk Boodry

Rakuten Bank Financial Highlights

This includes full details on Rakuten Bank's operating data / financial statements going back to FY14 along with commentary on recent trends. We...

Kirk Boodry

Rakuten Group (Neutral) - Bank IPO a Step Towards Unlocking Fintech but Mobile Worries Remain

We take a closer look at Rakuten Bank including a financial history but mobile remains the primary sentiment driver and steeper losses are a drag...

Kirk Boodry

SBI Sumishin Net Bank Pre-IPO - Earnings Forecast and Thoughts on Valuations

SBI Sumishin Net Bank (SSNB) will be looking to raise around US$1.1bn in its upcoming IPO. In this note, we talk about our earnings forecast and...

Sumeet Singh

SBI Sumishin Net Bank IPO: Bricks ‘n’ Clicks

SBI Sumishin is looking to raise about $1 billion. On balance, the fundamentals look sound. The IPO is worth a look for investors willing to brave...

Arun George

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